The European Central Bank responds to market turmoil

The ECB is here to close spreads

FRANKFURT AM MAIN, GERMANY - FEBRUARY 03: (EDITORS NOTE: This image was shot using a long exposure with a zoom effect.) The headquarters of the European Central Bank (ECB) pictured on February 03, 2022 in Frankfurt, Germany. Inflation in the Eurozone, driven by rising energy prices and consequences of supply chain bottlenecks, has outpaced ECB forecasts. (Photo by Thomas Lohnes/Getty Images)

Jun 15th 2022|BERLIN

Surging inflation and a weakening economy are not the only worries preoccupying the European Central Bank (ecb). As inflation rose higher still, the bank promised on June 9th to raise interest rates over the coming months and to end its asset purchases. Then, in subsequent days, financial markets decided to remind the central bank that the new policy could mean Italy’s public debt, at 150% of the country’s gdp, might look wobbly as interest rates start to rise. Italian government-borrowing costs started to climb.

This article appeared in the Finance & economics section of the print edition under the headline “Moment of truth”